Fall 2017, #28
I did not understand how the 12-24 factor was drawing attention in the answer, as opposed to the 12-ult factor - but I think I figured it out as I was typing this, which is not the first time this has happened, so maybe during the exam I should just pretend I'm getting everything wrong and then asking you a question.
Is the following statement true?
Statement: The consistency in ultimate claims ratios accident year-over-year imply stable development factors respective to those links in the development factors. For example, 2015: 61.5% (ultimate), compared to the prior accident years, mean nothing has changed from 24 months onwards, but in 2016, the drastic increase in ultimate claims, when compared to the stability of the prior years, narrows the focus to just the 12-24 factor.
Thanks,
Cj
Comments
Additionally, I plan on just screen grabbing the questions and answers whenever I post anything to save time for those that come after me. Is that going to be a strain on IT resources?
No, you can do a screen grab like you did. That's helpful.
Yes, writing out your question somehow makes you think through the issue differently versus just doing it in your head! What you said is correct. I thought through it myself by noticing the 12-Ult CDF is obviously too high. Then you have to pinpoint which column in the LDF triangle is responsible for that. As you said, all the prior estimates are fine which means everything is fine from 24 months onwards so the problem must be in 12-24.